A lottery is a scheme for the distribution of prizes by lot or chance, in which people pay a small amount of money for a chance to win a larger sum of money. The money collected in a lottery is usually used to fund public goods such as education. Although the casting of lots for decisions and determining fates has a long record in human history (including several instances in the Bible), modern state lotteries are of relatively recent origin. They are generally modeled after commercial enterprises. A government establishes a monopoly or a public corporation to run the lottery; licenses private firms for sales and promotion; begins operations with a modest number of relatively simple games; and, due to constant pressure for additional revenues, gradually expands in size and complexity, including the introduction of new games.

The term lottery may refer to any of a wide range of gambling schemes, but most state lotteries offer a game of chance in which the winners are determined by drawing numbers from a pre-printed set of balls. Most states have regulations that specify the minimum and maximum jackpot amounts that can be paid out in a given drawing, and limit the total prize payout to a defined limit. The rules also typically mandate that the winners be publicly declared and accounted for. In addition, most lotteries have a set percentage of the total ticket sales that is designated for the top prize or prizes. The remainder of the proceeds are distributed among the other winning tickets and to the general fund of the lottery.

While lottery revenues are often used to fund public goods, many critics allege that they do not benefit lower-income communities. These arguments have gained prominence in the wake of the economic crisis, but research indicates that the popularity of lotteries is unrelated to a state’s actual fiscal circumstances. As Clotfelter and Cook note, the majority of state lotteries enjoy widespread support even when public budgets are in sound financial condition.

The word “lottery” comes from the Middle Dutch noun loyt, which means the drawing of lots. In the 17th century, it came to be associated with a specific type of game in which tickets bearing certain letters were drawn for prizes of unequal value. Initially, the tickets were sold at dinner parties, and the winners were guests who had been lucky enough to hold the winning ticket. The word lottery was later used to describe the whole business of selling and distributing the tickets. The first recorded lotteries to distribute prize money occurred during the Roman Empire, for repairs in the city of Rome, and then, notably, in 1466 in Bruges, Belgium, where the lottery was introduced with the stated aim of providing assistance to the poor. A similar lottery was launched in France two years earlier. These early lotteries, like those of today, were popular public events with widespread appeal and substantial revenues. However, there were substantial irregularities and violations of regulations, including the issuance of tickets in exchange for goods.